"So what if it's pirated? You don't have a right to be in here unless you have a warrant."
That was the reaction from a man selling more than 250 illegally copied games titles from a shop front in the Sydney CBD when confronted by distributor Take 2 Interactive Software.
It highlights the problem faced by the software channel in the seemingly endless task of fighting piracy.
Hundreds of titles adorn the walls of the small retail space in a shopping arcade under the Hilton Hotel in Sydney, from nearly every software publisher and distributor represented in Australia. The store sells games for $20 per title, with photocopied and often misspelt cover art. "For every $100 spent, get one free game," boasts a sign on the wall.
But although software piracy is a criminal offence, police do little to tackle the problem. Take 2 Interactive Software managing director James Ellingford had referred the operation to the Federal Police. However, his complaint has fallen on deaf ears.
"We have dealt with Ellingford's complaint and have advised him we are not in a position to act at this stage," Federal Police spokesman Steve Simpson told ARN. "It is up to Ellingford to take civil action. But we are not unsympathetic to his plight. I can understand his position but unfortunately we only have a finite amount of resources.
"We assess each matter and judge it according to certain criteria. I can't give a dollar cutoff figure but certainly the scale of the fraud is obviously a factor."
The overall impact on the public interest is also a factor, he said.
Take 2 Interactive Software national sales director Roy Stanton managed to sequester a number of games titles, some of which have yet to be commercially released in the Australian market. However, without the necessary support from the government, he described it as a "hollow victory".
"It is illegal -- this isn't even a grey import product. People really underestimate the cost of piracy on the industry and the sums of money involved can be mind-boggling. Five copies turn into 5000 copies incredibly fast."
Earlier this month, the chairman of the Australian Visual Software Distributors Association (AVSDA), Michael Ephraim, slammed the Australian Government for its ineffective legislation against software piracy. Publishers, distributors and retailers alike agree more needs to be done to address the issue.
"It is disgusting. Why isn't the place closed down?" asked Harvey Norman general manager of computers and communications John Slack-Smith. "It [piracy] undermines retailers like Harvey Norman and everything the distributors are doing with a great product. We are vehemently opposed to piracy -- it takes away from what we do as a business and the stronger we can be against it, the better it is for all concerned."
Slack-Smith said the retailer feeds information about piracy operations to industry bodies like AVSDA but there is an ongoing need for daily vigilance. It is too easy for pirates to simply shut up shop and move premises once they have been found out.
"AVSDA needs to be doing more about piracy," said OziSoft's Kym Warner. "It kills the industry year after year. We could probably sell triple what we sell now [without piracy]."
OziSoft, which distributes games for Codemasters, has seen the effects first-hand when the latter introduced its anti-counterfeiting system, FADE, which disables key gaming features on counterfeit CDs and DVDs. Even though the system was soon cracked, the effects were measurable.
"For around six weeks after the launch, we did sell a lot more games than if the pirated CDs had worked. You really see a different sell-through; the figures are quite dramatic."
The Federal Police's Simpson said pressure from industry bodies such as the Business Software Association of Australia and AVSDA may have an effect on the police's decision to investigate further.
"I expect it would [have an impact], he said. "Whether that would be enough to push it to the point where we could take [the investigation] on, I don't know."
Companies can also employ private contractors to gather sufficient evidence to warrant police action, he said.